Friday, 30 November 2012

C. Modern Manufacture

Marx then gives extensive examples of these kinds
of employment and the abuses associated with them. As Marx says,
many of these have already been elaborated in the Chapter on the
Working Day. More still are given by Engels in The Condition Of The Working Class In England and for that reason, I do not intend
detailing them here.

E. Passage of Modern Manufacture, an Domestic
Industry into Modern Mechanical Industry. The Hastening of This
Revolution by the Application of the Factory Acts to those Industries

“The cheapening of labour-power, by sheer
abuse of the labour of women and children, by sheer robbery of every
normal condition requisite for working and living, and by the sheer
brutality of overwork and night-work, meets at last with natural
obstacles that cannot be overstepped. So also, when based on these
methods, do the cheapening of commodities and capitalist exploitation
in general. So soon as this point is at last reached — and it takes
many years — the hour has struck for the introduction of machinery,
and for the thenceforth rapid conversion of the scattered domestic
industries and also of manufactures into factory industries.” (p
442)

In 1861, around 1 million people were employed
outside the factory system, in manufacture and domestic production of
clothing alone. Many of these, Marx says, are workers that had been
“set free” as a result of the introduction of machines into
factories.

“The production of wearing apparel is carried
on partly in manufactories in whose workrooms there is but a
reproduction of that division of labour, the membra disjecta of which
were found ready to hand; partly by small master-handicraftsmen;
these, however, do not, as formerly, work for individual consumers,
but for manufactories and warehouses, and to such an extent that
often whole towns and stretches of country carry on certain branches,
such as shoemaking, as a speciality; finally, on a very great scale
by the so-called domestic workers, who form an external department of
the manufactories, warehouses, and even of the workshops of the
smaller masters.” (p 442-3)

Now, the raw materials were provided by machine
industry and the mass of the workers to process them, workers that
had been replaced by it. This vast reserve army was now available
for capital to attract or repel according to the needs of market
conditions.

“The decisively revolutionary machine, the
machine which attacks in an equal degree the whole of the numberless
branches of this sphere of production, dressmaking, tailoring,
shoemaking, sewing, hat-making, and many others, is the
sewing-machine.” (p 443)

That is perhaps fitting because thousands of years
earlier, one of the most important tools developed was the bone
needle, which made it possible for the first time, to create fitted
clothing as opposed to merely draped animal skins.

As with the introduction of machinery elsewhere,
the wages of the machine workers rises compared to that of the
domestic hand workers. The more highly skilled, usually male workers
sinks, unable to compete with the machines. The majority of the
machine workers are young women and girls. The elderly women and
young children are driven out.

On the one hand, Marx describes the rise in
London, in the ten years up to 1864, of starvation which coincided
with the introduction of the sewing machine. That, as a result of
those thrown out of work. On the other, these new machinists worked
in poor conditions, and for long hours, though not as long as for
those previously employed in domestic production.

Exactly how the sewing machine changed the
production in each area depended on how it was previously organised
i.e. on the basis of manufacture or handicraft, simple co-operation
and so on, and this varied from one type of product to another.

As more capital is invested in sewing machines so
these machines produce a glut of commodities. The domestic workers
are expropriated as they sell their own machines. This leads to an
overproduction of machines. The machine makers then turn to renting
machines, thereby destroying the small scale machine owners. In the
meantime, continual changes in the production of machines reduces
their value,

“...and their ever-increasing cheapness,
depreciate day by day the older makes, and allow of their being sold
in great numbers, at absurd prices, to large capitalists, who alone
can thus employ them at a profit.” (p 445)

On the one hand this process of concentration into
larger workplaces drives towards the introduction of steam power to
drive a large number of machines, but at the same time, the
introduction of steam provides another advantage over the small
producers, further stimulating concentration.

“Thus England is at present experiencing, not
only in the colossal industry of making wearing apparel, but in most
of the other trades mentioned above, the conversion of manufacture,
of handicrafts, and of domestic work into the factory system, after
each of those forms of production, totally changed and disorganised.
under the influence of modern industry, has long ago reproduced, and
even overdone, all the horrors of the factory system, without
participating in any of the elements of social progress it contains.”
(p 446)

Marx sets out the basis of Engels' later comment
in the 1892 Preface to “The Condition of the Working Class”, that
the large employers embraced the Factory Acts as a means of
destroying their smaller competitors.

“This industrial revolution which takes place
spontaneously, is artificially helped on by the extension of the
Factory Acts to all industries in which women, young persons and
children are employed. The compulsory regulation of the working-day
as regards its length, pauses, beginning and end, the system of
relays of children, the exclusion of all children under a certain
age, &c., necessitate on the one hand more machinery and the
substitution of steam as a motive power in the place of muscles. On
the other hand, in order to make up for the loss of time, an
expansion occurs of the means of production used in common, of the
furnaces, buildings, &c., in one word, greater concentration of
the means of production and a correspondingly greater concourse of
workpeople. The chief objection, repeatedly and passionately urged on
behalf of each manufacture threatened with the Factory Act, is in
fact this, that in order to continue the business on the old scale a
greater outlay of capital will be necessary. But as regards labour in
the so-called domestic industries and the intermediate forms between
them and Manufacture, so soon as limits are put to the working-day
and to the employment of children, those industries go to the wall.
Unlimited exploitation of cheap labour-power is the sole foundation
of their power to compete.” (p 446-7)

The equivalent today, in Britain, is the extent to
which Welfarism subsidises the worst employers. So long as bad
employers can pay low wages, and still attract workers, whose income
is bolstered by transfers from other workers, in the form of Child
Benefits, Tax Credits , and so on, those – usually small,
inefficient – employers will do so. That in itself holds back the
clearing out of these types of inefficient capital, and their
replacement with efficient, more high value production, able to pay
better wages to its workers.

A similar process was described by Marx in
relation to earthenware manufacture, where employers objected to the
limitation and pausing of the working day, on the grounds that it was
not compatible with the production process.

“In 1864, however, they were brought under
the Act, and within sixteen months every “impossibility” had
vanished.

'The
improved method,” called forth by the Act, “of making slip by
pressure instead of by evaporation, the newly-constructed stoves for
drying the ware in its green state, &c., are each events of great
importance in the pottery art, and mark an advance which the
preceding century could not rival.... It has even considerably
reduced the temperature of the stoves themselves with a considerable
saving of fuel, and with a readier effect on the ware.'

In spite of every prophecy, the cost-price of
earthenware did not rise, but the quantity produced did, and to such
an extent that the export for the twelve months, ending December,
1865, exceeded in value by £138,628 the average of the preceding
three years.” (p 447)

How many firms that survive in Britain today, only
on the basis of the low wages and poor conditions of their workers,
would have to invest in and develop more efficient methods if the
income of those workers were no longer supplemented by transfers from
other workers? In fact, according to a report in the FT recently, 10% of British firms are "zombie" companies, essentially bust, unable to generate enough income to repay the capital sum on their loans, and only able to pay the interest because of unsustainably low interest rates and forbearance by banks afraid that calling in the loan would mean losing most of their money. These inevitably small firms, emply around 2 million workers, who will also be on very low wages, and poor conditions. It amounts to not only 2 million workers tied up in inefficient production, explaining the recent ONS data about the number of workers who are under employed, and why the economy is shrinking, but unemployment has not risen, but also large amounts of Capital tied up that could be employed elsewhere in the economy more effectively in high value production, paying workers higher wages, and providing them with better conditions. It also means that the bank lending to these companies is locked up, that could have been available for recapitalising the bank, or for lending to more profitable companies.

A similar regulation occurs in respect of the
peaks and troughs of employment during the year. Marx describes how,
in addition to the normal business cycle, improved means of
communication had led to buyers giving orders at short notice, to
suppliers, for large orders. Together with changes in fashion, this
meant suppliers needed to quickly employ workers, and work them for
long hours, to complete the orders. Then these workers would be laid
off, cast back into the reserve army.

But, the introduction of the Factory Actsprevented this overwork during given periods, which meant work over
the year itself had to be spread out, and this was itself more
compatible with the needs of large scale machine industry, that
production should be more or less at a steady rate, and continuous.

“The thoroughly conscientious investigations
of the Children’s Employment Commission prove that the effect of
the regulation of the hours of work, in some industries, was to
spread the mass of labour previously employed more evenly over the
whole year that this regulation was the first rational bridle on the
murderous, meaningless caprices of fashion, caprices that consort so
badly with the system of modern industry; that the development of
ocean navigation and of the means of communication generally, has
swept away the technical basis on which season-work was really
supported, and that all other so-called unconquerable difficulties
vanish before larger buildings, additional machinery, increase in the
number of workpeople employed, and the alterations caused by all
these in the mode of conducting the wholesale trade. But for all
that, capital never becomes reconciled to such changes — and this
is admitted over and over again by its own representatives — except
“under the pressure of a General Act of Parliament” for the
compulsory regulation of the hours of labour.” (p 450-1)Back To Part 10

Thursday, 29 November 2012

A couple of years ago I wrote about the bifurcations in the global economy, some of which are also mirrored within national economies. Those bifurcations have not only continued, but have intensified. On the one hand, China and other dynamic economies continue to grow at amazingly rapid rates. China, despite attempts by the government to slow it down, and the effects of a global cyclical downturn, continues to grow at around 8%. These economies have also built up huge reserves of cash, which they have lent out to economies in Europe, and North America, that have not been growing so rapidly. Within national economies, large companies have also built up huge cash piles, and are able to utilise historically low interest rates to borrow even more, should they choose. At the same time, hugely indebted smaller companies and individuals in these old economies now find it impossible to borrow, and in any case are trying to reduce their borrowing.

On the one hand, we have some extremely dynamic and profitable companies - much of the growth in the US, and in US employment has been in high value added production - and on the other we have a large number of "zombie" companies. According to the FT recently, around 10% of firms in Britain are zombie companies. That is they are companies that are essentially bust. They are unable to generate sufficient income to repay the capital on their loans, and only manage to pay the interest, because of the low level of interest rates, and forebearance by the banks, afraid they might not get their money back at all! If interest rates rise only slightly, or if things get only marginally worse, these zombie companies are likely to drop like flies, thereby exposing the zombie nature of the economy created by the Liberal-Tories. If 10% of UK firms went bust, that means around 2 million people that would be added to the dole queue!!!

A similar situation exists in Europe, with a bifurcation between Northern Europe and Southern Europe, the latter also being extremely zombified, and only kept going by low interest rates, huge amounts of money printing, and state welfare from the North. The chances of these zombies exploding is still quite significant. Until Europe grasps the nettle, begins to establish a fiscally, politically as well as monetarily integrated state, its problems are likely to drag on. That will also require, a significant fiscal stimulus, and directed invested to the periphery to stimulate real growth. But, that remains essentially a political rather than economic crisis.

But, the signs are there that even without such a change, the strength of the Long Wave Boom, might just yet rescue these economies. The US, which from 2008 has followed a policy of Keynesian fiscal expansion as well as Friedmanite Monetary stimulus, has continued to grow. As I've pointed out before, for at least the last thirty years the global economy has had a three year cycle. That cycle coincided with the 2008 Financial Meltdown, and a new slow down began towards the end of 2011. It was due to end by the end of 2012, beginning 2013, and that looks like it is happening.

The US, whose growth and employment had been growing rapidly, once again slowed down at the beginning of the year. Part of that was also due to Republicans in the US frustrating some of Obama's stimulus policies, as well as concern by sections of US Capital over political stalemate, and what the consequecne of that might be for the debt Ceiling, and the Fiscal Cliff. But, the latest US growth figures show that its cyclical downturn has ended. Not only have employment figures, as well as Consumer Confidence numbers improved in recent months, the latest data out today shows that the economy itself is growing again, quite rapidly. The original figure for Q3 GDP was 2%, but the revised figure, out today, has raised that to 2.7%!! That is a significant quickening in growth, and goes along with yet another improvment in the payroll numbers.

With the US again looking like the cyclical downturn is over, with China once again returning to stronger growth, and large areas of the world still experiencing rapid growth, it seems clear that not only is the Long Wave Boom still in place, but its strength is sufficient to override the particular problems of specific regions, such as Europe. Of course, that could still be derailed. If European politicans fail to address the political crisis, there, if Cameron's Government insists on pursuing austerity, and thereby leads to the onward march of the zombies, that could manifest itself in a huge crisis, which would necessarily ripple out into the global economy.

But, the more the US, China. and the other main drivers of the gloabl economy resume strong growth, the less likely that is. That growth is itself likely to help deal with the question of US debt, along with some of it being inflated away. It is also likely to lead to renewed growth in Germany, and otehr northern European economies, which will give them increased head room to deal with the problems of peripheral European debt. Again some of that could be inflated away by an ECB engaging in the same kind of money printing that the Bank of England and Federal Reserve have done, which would also bring about a much needed lowering in the value of the Euro.

A couple of years ago, I also wrote that the political crisis in Europe could spark an economic crisis similar to the 1930's Depression, and its spark would be a collapse in property prices. Again that still remains a possibility, but the EU authorities might have done just enough to buy enough time to resolve those political issues within the context of resumed growth. Ironically, that is still likely to lead to a property price crash. In the US, and Ireland, property prices fell by up to 75%, and that has resulted in the property market once again becoming affordable, bringing stability with it. In Spain and the UK, although actual selling prices have fallen by around 30%, they have not yet corrected by anything like the figures for the US and Ireland, and have at least another 50% to fall - more like 70% from current asking prices.

Part of the reason these prices have not yet corrected, is like the situation with the zombie companies referred to earlier. Borrowers unable to repay the Capital sum, are enjoying forbearance from banks afraid that if they foreclose they will spark a firesale the consequence of which will be they will never get their money back, and because large amounts of money printing and intervention have kept interest rates at unsustainably low levels. In Spain that is ending. Banks bad loan ratios have gone from around 0.5%, to over 10% in a matter of months, as they are forced to take a more realistic view of assets on their books, prior to any bail-out from the EU, which will expose the zombie nature of those banks. Spanish banks are busy at the moment trying to dispose of those properties they have foreclosed on, ahead of the 6% increase in Spanish Property taxes, and ahead of the introduction of the Bad Bank. That is bringing prices for these properties down considerably. My wife spotted a nice villa in Northern Costa Blanca the other day being sold in a bank sale for just €20,000! There were plenty of others at equally low prices. That is also pressing down on all other prices.

But, if growth begins to return even fairly modestly, the massive Financial Repression, that has led to huge amounts of money being hoarded, or put into Bonds at ridiculously low Yields (some of them have even issued with a negative Coupon i.e. you are paying to lend out your money) will quickly end. There are already signs that money is moving from Bonds into Equities. Any sign that a deal on the Fiscal Cliff will be reached could see a massive move into US Equities, with an equally rapid move out of Bonds. That means interest rates ill rise sharply over night. That means the zombie companies, as well as the zombie mortgages will explode. Borrowers will be unable to pay even the interest on their loans. The zombie banks, that exist only on the back of the fiction of the value of their loans, and fiction of property prices will then implode. They will be forced to foreclose on loans or be completely destroyed. The irony of an economic recovery is that thousands of small businesses will go bust, and property prices will also collapse!

Tuesday, 27 November 2012

8) REVOLUTION EFFECTED IN MANUFACTURE,
HANDICRAFTS, AND DOMESTIC INDUSTRY BY MODERN INDUSTRY

A. Overthrow of Co-operation Based on Handicraft,
and on the Division of Labour

Manufacturing does away with the division of
labour of handicraft and manufacture. Increasingly, the machine
incorporates the several processes that division of labour had
established into one continuous process, as was seen with the
envelope machine. Wherever, human motive power is replaced by
machinery, this sees the introduction of the factory system, because
it is only efficient to use this motive power – water, steam,
electric etc. - to drive many machines, and carry on production on a
large scale.

However, there are exceptions. Agriculture
provides one example. The introduction of expensive machinery tends
to drive towards larger farms. However, its possible for a number of
smaller farms to pool their resources to buy equipment and then share
its use. There were even experiments to do this in providing steam
power to cottage based weavers.

“In the Coventry silk
weaving industry the experiment of “cottage factories” was tried.
In the centre of a square surrounded by rows of cottages, an
engine-house was built and the engine connected by shafts with the
looms in the cottages. In all cases the power was hired at so much
per loom. The rent was payable weekly, whether the looms worked or
not. Each cottage held from 2 to 6 looms; some belonged to the
weaver, some were bought on credit, some were hired. The struggle
between these cottage factories and the factory proper, lasted over
12 years. It ended with the complete ruin of the 300 cottage
factories.” (p 433)

There were also Hydraulic Power system developed
in Manchester, London and Kingston upon Hull, which provided a clean
alternative to steam engines, and powered machinery, bridges, cranes,
lifts and other machines across those cities –
Manchester Hydraulic Power.

Where the cost of the motive power falls, the
potential for using it on a smaller scale opens up. For example, the
introduction of the internal combustion engine and electric motors
makes possible the economic powering of individual machines without
this needing to be done on a massive scale.

There are a number of similar developments that
can be seen in more recent times. Some remaining areas of domestic
production were transferred to “factories” and then back to the
home. For example laundry. In the post WWII period, when capital
needed more labour power and encouraged married women to enter the
workforce, the task of washing clothes was transferred to industrial
laundries, like that established by the Co-op. This was supplemented
and then replaced by the introduction of laundrettes, which provided
industrial scale washers and dryers. But, as the cost of producing
these fell, the machines were introduced into the home, and the work
returned to the domestic sphere.

A similar situation has occurred in relation to
the media. The huge cheapening of equipment means that the
development of large scale media production has broken down, with
much production farmed out to small scale, almost handicraft or
manufacture type production, by small companies or even to
individuals – e.g. citizen journalism, blogging etc.

Cheap electric power, able to power the most
important machines of the modern age – computers – connected via
the Internet, which functions as the transmission mechanism,
described by Marx, means that the majority of modern, high value,
intellectual production can be done at home, and on the same kind of
co-operative basis, based on a division of labour, as happened with
handicraft and manufacture. One person having produced film footage
can download it, to their computer, send it to a sound engineer, who
can add the soundtrack etc., and then send it to and editor and so
on.

Book keepers and payroll clerks can sit at home
with a computer and process data and so on. Software engineers can
work on specific pieces of code. In parts of the world like
Singapore, with 1 Gig broadband speeds, even education can now be
provided at home, with one teacher able to provide lessons to vast
numbers of students.

Moreover, these developments mean that many of the
people employed to do this work can be employed on an individual
rather than collective basis. In other words, they can be paid for
the provision of a commodity other than labour power. This returns
such producers to that of the peasant employed in handicraft
production.

B. Reaction of the Factory System on Manufacture
and Domestic Industries

The methods employed by the factory system, of
breaking down the process of production and then applying science to
determine how they can be most effectively performed, spreads out
into all areas of economic activity.

These changes break down the composition of the
collective labourer based on the division of labour under
manufacturing. They create the conditions for the employment of
women and children as cheap labour, and all the excesses associated
with that in the early stages. But, when that becomes more
regulated, within the factories, it leaves its scope in the other
sectors unaltered. Domestic industries under handicraft or
manufacture is quite different to that which applies under machine
industry.

“This modern so-called
domestic industry has nothing, except the name, in common with the
old-fashioned domestic industry, the existence of which pre-supposes
independent urban handicrafts, independent peasant farming, and above
all, a dwelling-house for the labourer and his family. That
old-fashioned industry has now been converted into an outside
department of the factory, the manufactory, or the warehouse. Besides
the factory operatives, the manufacturing workmen and the
handicraftsman, whom it concentrates in large masses at one spot, and
directly commands, capital also sets in motion, by means, of
invisible threads, another army; that of the workers in the domestic
industries, who dwell in the large towns and -are also scattered over
the face of the country.” (p 434)

This domestic industry is particularly oppressive
because of its nature. In the factory, the machine removes much of
the heavy work. The Factory Acts eventually place limits on the
conditions, and the number of workers collected together, and
organised in Trades Unions, facilitates the workers in defending
themselves against encroachments on those limits. Atomised and
isolated, the domestic workers lack these safeguards.

“This exploitation is more shameless in the
so-called domestic industry than in manufactures, and that because
the power of resistance in the labourers decreases with their
dissemination; because a whole series of plundering parasites
insinuate themselves between the employer and the workman; because a
domestic industry has always to compete either with the factory
system, or with manufacturing in the same branch of production;
because poverty robs the workman of the conditions most essential to
his labour, of space, light and ventilation; because employment
becomes more and more irregular; and, finally, because in these the
last resorts of the masses made “redundant” by modern industry
and Agriculture, competition for work attains its maximum.” (p 435)Back To Part 9Forward To Part 11

Monday, 26 November 2012

Whether the
incidence of flooding, such as that we are seeing currently is to do
with global warming or not, it is clear that it is having serious
consequences for those affected by it. No one can fail to feel great
sympathy for all those whose homes are being flooded, often not for
the first time. The issues surrounding it raise a number of
questions.

Firstly, a
huge amount of money is being spent through the Environment Agency on
“flood defences”. These seem to be more effective in some places
than in others, but the more important question that should be asked
is whether this money should be being spent at all, or if it is, who
should be funding it. In the United States, there is considerable
evidence, over a long period of time that the construction of flood
defences is counter-productive. Huge amounts of money, for example,
were spent on flood defences along great stretches of the
Mississippi. The consequence, was, however, that it merely made
flooding elsewhere along its length, worse, or resulted in flooding
in areas that previously did not suffer from it. In fact, it was
decided that the better solution was to remove the flood defences, in
order to allow the river to flood naturally, into its flood plain.
That has benefits in depositing natural nutrients to the soil, rather
than those deposits building up as silt elsewhere, itself
contributing to a flooding problem.

That, of
course, leads to the question of damage to property in the flood
plain. But, for years, people realised that it was not a good idea
to build houses or businesses in a flood plain, precisely because
they were likely to get flooded! Businesses that were established
were ones that could take advantage of it being a flood plain, for
example appropriate forms of agriculture. In reality, the cost of
providing flood defences, to prevent rivers from doing what they
naturally should do – dissipate their excess water into the flood
plain – is a direct subsidy by society, to capitalists who decide
to build houses, or businesses in these high risk areas. Usually,
these capitalists decide to build houses etc. in these areas, because
the land is cheap, which means they can make bigger profits. But,
the land is cheap, precisely because it is a flood plain! Why should
the rest of us, subsidise these capitalists out of our taxes, for
taking irresponsible decisions about where to build?
The news, yesterday covered the story of a hospital whose Operating Theatre was flooding, because the hospital had been built on top of a stream! Who would have ever thought that if you build on top of a stream, you might suffer from flooding!

The vast
sums of money that go into flood defences would be much better spent
in providing vital services to those who suffer from life's
iniquities for no fault of their own. For example, I can quite
happily accept that it is a good thing to have some form of social
insurance scheme (preferably one created by and controlled by workers
themselves) which provides healthcare for people who fall ill, or who
lose their job, and to provide for them in old age. However, I see
no reason why I should subsidise others for failing to take account
of the consequences of their actions, and who simply expect others to
pick up the tab!

If someone
decides rashly to borrow £100,000 in order to buy 100,000 lottery
tickets in the mistaken belief they might win the jackpot, I see no
reason why I along with other workers should compensate them for
their almost inevitable loss of that £100,000. After all, if they
won, they would not be sharing their winnings with the rest of us.
If, a builder decides to build a housing estate on a flood plain, and
can't sell any of the houses, because no one wants the risk of
regularly having their house flooded, I equally see no reason why
workers should compensate that builder for their gamble either,
because, if the builder did sell those houses, again they would not
be sharing their profits with the rest of us.

A field of unwanted Trabants.

Marx
describes this in Capital. It is the concept of socially necessary
labour. In other words, labour is only socially necessary, only
creates value if it is expended on production that is demanded, that
finds a buyer in the market. If it doesn't then the labour expended
was not socially necessary, it created no new value. In fact,
compensating those that make such mistakes is the worst thing that
can happen, because it means that the mistake is not recognised, and
can, therefore, continue rather than being corrected. It means that
Capital continues to be wasted. A similar thing happened with the
economies of the USSR and Eastern Europe under Stalinism. These
economies produced vast amounts of products that were of little or no
value, even though they consumed large amounts of labour in their
production. They had little value, because the labour they consumed
was not socially necessary labour. That was for several reasons.
Firstly, large amounts of goods were produced that nobody wanted, but
which were required to meet the bureaucratic planning targets.
Secondly, even where products were produced that were demanded they
were of the wrong type, for example, jeans that nobody wanted
compared to a pair of Levis. Thirdly, the quality of the goods
produced was shoddy, so that nobody would pay the price.

That
situation could continue, because the bureaucrats who controlled this
production had nothing to lose from producing poor quality goods that
no one wanted. Even if their output could not be sold, they would
continue to be paid, and their enterprises would continue to be paid
by the State. The same thing occurs with State Capitalism.
Businesses that go bust, are sometimes nationalised, and so the fact
that those businesses went bust because they were producing things no
one or not enough people wanted, is ignored, the businesses are
compensated by other workers via their tax contributions, and thereby
the waste of resources is allowed to persist. The same applies with the way that poor quality of provision continues with the NHS. That is also what
happened with the Banks.

As with the
example above, the Banks were allowed to gamble for years. When
those gambles paid off, the rewards went to the Banks bosses, and
some of the highly skilled traders who produced the profits and
capital gains, as well as to the banks' shareholders. When the banks
gambles failed, instead of the bank bosses, the traders and the
shareholders suffering the consequences, they were bailed out by the
State! In fact, as I said at the time of Northern Rock, and as I've
said at the time of the Irish Bank collapses, the banks should have
been allowed to go bust, and the shareholders in those banks should
have lost all their money.

The deposits
of all the savers who put their money in those Banks in the not
unreasonable belief that they were taking no risk with their money,
should have been protected, and having become worthless, the workers
of those banks should have taken them over, along with all their
assets in the form of mortgages and loans, and run them as
co-operatives. It is unlikely that any such gambling would have been
undertaken again in the near future, and the shareholders of other
banks would have an incentive to keep control of the bureaucrats
running them. Had that collapsed the share prices of other companies
with shareholdings in those banks, then as I pointed out in relation
to a default by Greece, that need not have a negative consequence for
workers. If share prices fall that in no way affects the
productiveness of the machines and other capital equipment of the
firms whose share price has fallen. Consequently, it implies no real
diminution in the capacity to create real wealth. Moreover, the
profits created will then represent a higher proportion of this now
devalued paper capital.

It means
that workers contributions into their Pension Schemes can buy more of
these shares, giving them a bigger stake, and thereby also a bigger
pension. Pensions are paid out of the revenues of invested funds,
not from Capital Gains.

But, by the
same token there is no reason to bail out builders, or money
capitalists who advance capital to those builders, who gamble by
building houses in flood plains or other high risk areas. Of course,
we are invited to see things not as bailing out these capitalists,
but of the poor home buyers who bought the houses. But, those buyers
only bought, because they too have been conditioned to believe that
they can take decisions without regard for their consequence. I see
no reason why someone who knowingly buys a house in a flood plain
should be subsidised by the rest of us, who wisely chose not to, any
more than we should compensate the person who loses their money on
the lottery or some other form of gambling.

I'm happy
that a gambling addict should be entitled to treatment for their
condition. I'm happy that someone who loses their house due to
flooding should be rehoused in a Council house, but I see no reason
why they should be compensated in any other way out of public funds.

Even less do
I see a reason why the insurance companies should also be subsidised
out of public funds, in order to provide cheaper insurance for houses
built in the flood plain. If buyers did not buy, and insurers did
not insure houses in the flood plain, builders would soon stop
building there, when they went bust, because they couldn't sell their
houses. Then, society could also divert the billions of pounds spent
on unnecessarily preventing flooding, into areas where it is really
needed in the NHS, etc. Of course, if people wanted to buy houses in
the flood plain, and pay the cost of repairing flood damage, or the
higher cost of insurance premiums, out of their own pocket, that
would be up to them.

In the 19th Century, workers provided their own
welfare provision via Friendly Societies. They rightly
did not trust the Capitalist State to provide for them. Marx,
Engels and the First International demanded that State
keep its hands off the Friendly Societies for that reason,
and opposed the creation of National Insurance Schemes by it,
that drained the workers own funds.

A similar
thing applies to other areas of life. For example, if we had a
worker owned and controlled Social Insurance scheme, as advocated by
Marx and Engels, workers would be well advised to arrange it so that
the Insurance Premiums discouraged unhealthy behaviour, by levying
higher rates on smokers, those grossly overweight and so on. That is
not just because otherwise, workers would soon find that their funds
ran out, but because workers should attempt to create a health system
that does not sell health as a commodity, repairing health when it is
damaged, but which attempts to prevent ill-health to begin with.
That is not just because it is far more efficient, but more
importantly because a socialistic health policy should do so for the
well-being of the workers. In doing so, as Marx sets out, we
unavoidably are forced to make choices.

Marx
discusses this in the Critique of the Gotha Programme. He writes, of
the first stage of Communism, that although workers of the same type
would continue to be paid the same wages, this apparent equality,
means a real inequality, because no two workers are the same. One
worker will be able to work faster or for longer than another; one
worker will have several children to provide for, whilst another will
not.

“Hence,
equal right here is still in principle --
bourgeois right, although principle and
practice are no longer at loggerheads, while the exchange of
equivalents in commodity exchange exists only on the average and not
in the individual case.

Marx saw no reason why, even
in the first stage of Communism,
simply having children to provide
for, should entitle workers to some
additional payment out of society's
social fund. Its Utopianism to believe
that Capitalism can provide a higher
level of equality than even the first
stage of Communism. "Right can never be higher than the economic structure of society and its cultural development conditioned thereby."

In spite of this advance, this equal right is
still constantly stigmatized by a bourgeois limitation. The right of
the producers is proportional to the labour
they supply; the equality consists in the fact that measurement is
made with an equal standard, labour.

But one man is superior to another physically,
or mentally, and supplies more labour in the same time, or can labour
for a longer time; and labour, to serve as a measure, must be defined
by its duration or intensity, otherwise it ceases to be a standard of
measurement. This equal right is an unequal
right for unequal labour. It recognizes no class differences, because
everyone is only a worker like everyone else; but it tacitly
recognizes unequal individual endowment, and thus productive
capacity, as a natural privilege. It is, therefore, a right of
inequality, in its content, like every right. Right, by its very
nature, can consist only in the application of an equal standard; but
unequal individuals (and they would not be different individuals if
they were not unequal) are measurable only by an equal standard
insofar as they are brought under an equal point of view, are taken
from one definite side only -- for instance, in the present case, are
regarded only as workers and nothing more is
seen in them, everything else being ignored. Further, one worker is
married, another is not; one has more children than another, and so
on and so forth. Thus, with an equal performance of labour, and hence
an equal in the social consumption fund, one will in fact receive
more than another, one will be richer than another, and so on. To
avoid all these defects, right, instead of being equal, would have to
be unequal.

But these defects are inevitable in the first
phase of communist society as it is when it has just emerged after
prolonged birth pangs from capitalist society. Right can never be
higher than the economic structure of society and its cultural
development conditioned thereby.”

So, its obvious that within Capitalist Society it
is Utopianism to believe that a higher degree of equality could
prevail, or that these choices conditioned by the Law of Value could
be averted.

In the same way, workers who owned and controlled
their own social insurance scheme would rightly implement the
principle of Socialism outlined in the above by Marx,

“He who does not work, neither shall he eat.”

Rather than Marx's revolutionary strategy of workers
developing their independence from Capital and its State,
by relying on their own self-activity, creating their own
enterprises and structures in opposition to Capital,
the Fabians and their co-thinkers beleived that Socialism
could be built with the help of that State - or even by that State -
by redistributing income. Unfortunately, redistributing income
does not work. It does not redistribute the ownership of
the means of production, which determines income distribution, and
it ends up not a redistribution from Capitalists to workers
but simply one group of workers giving some of their income to
a worse off group of workers. Not surprisingly, that changes nothing,
and the better off workers end up getting pissed off, and voting for
Tories.

That is they
would expect those provided for out of those funds during periods of
unemployment, to do work in return for it. This is not the same as
the Workfare Systems of Welfare Capitalism, which expect workers to
do work for Capital in return for payments of dole. This is work
done for the benefit of workers, and their communities, thereby
establishing a workers economy in opposition to that of Capital.

The same
applies in relation to other forms of Welfare Benefits.
Unfortunately, the infection of the Labour Movement with various
forms of bourgeois Liberalism, of Lassalleanism and Fabianism have
undermined these aspects of Marx’s teaching. For example, if we
look at Marx’s statement above,

“Further,
one worker is married, another is not; one has more children than
another, and so on and so forth. Thus, with an equal performance of
labor, and hence an equal in the social consumption fund, one will in
fact receive more than another, one will be richer than another, and
so on.”

In other words, if two workers do a 30 hour week, they will be
entitled to 30 hours of Value from the social consumption fund. But,
because one worker will have children, and the other will not, the
latter will effectively be better off, because what they take out
will not have to cover any children. It is clear that this applies
with all the more force under Capitalism. Workers are entitled to
make a choice to have as many children as they like, but they have no
right to demand that other workers compensate them for that decision,
via the payment of additional benefits, such as Child Benefit, Tax
Credit and so on. In fact, as Marx makes clear in Capital, what such
payments do, is to subsidise Capitalists, and in particular the worst
Capitalists, who are thereby able to get away with paying wages
insufficient to sustain the workers needs. For example Marx writes
about, the way the hand loom weavers were sustained in misery for
years as a result of the payment of relief out of Parish Funds.

“The
competition between hand-weaving and power-weaving in England, before
the passing of the Poor Law of 1833, was prolonged by supplementing
the wages, which had fallen considerably below the minimum, with
parish relief. “The Rev. Mr. Turner was, in 1827, rector of
Wilmslow in Cheshire, a manufacturing district. The questions of the
Committee of Emigration, and Mr. Turner’s answers, show how the
competition of human labour is maintained against machinery.
‘Question: Has not the use of the power-loom superseded the use of
the hand-loom? Answer: Undoubtedly; it would have superseded them
much more than it has done, if the hand-loom weavers were not enabled
to submit to a reduction of wages.’ ‘Question: But in submitting
he has accepted wages which are insufficient to support him, and
looks to parochial contribution as the remainder of his support?
Answer: Yes, and in fact the competition between the hand-loom and
the power-loom is maintained out of the poor-rates.’ Thus degrading
pauperism or expatriation, is the benefit which the industrious
receive from the introduction of machinery, to be reduced from the
respectable and in some degree independent mechanic, to the cringing
wretch who lives on the debasing bread of charity. This they call a
temporary inconvenience.” (“A Prize Essay on the Comparative
Merits of Competition and Co-operation.” Lond., 1834, p. 29.) (Note
1, p 406)

And,
as
Marx makes clear, the consequence of this subsidy to Capital, is that
it fails to introduce new, more efficient means of production,
relying instead for its profits on low wages and poor conditions. We
should not subsidise Capitalist builders who cut costs by building in
the flood plain; we should not subsidise low paying inefficient
employers, by supplementing workers wages with Benefits paid for by
other workers' taxes; we should not subsidise capitalist banks that
go bust; we should not subsidise other firms that go bust. We should
build our own worker owned and controlled alternative.

Sunday, 25 November 2012

Turkey has
asked NATO to provide it with Patriot Missiles, for deployment on its
southern border –
Reuters.
The reason being given is Turkey's concern about a possible threat
from Syria. I doubt this is the real reason.

For one
thing, there is no reason that Syria would launch an attack on
Turkey. It would be suicide, at a time when the Syrian regime has
enough problems to deal with. On the contrary, it is Turkey, which
has been probing Syria's borders. That is what caused one of its
jets to be shot down several months ago. Syria is conducting
operations along its border with Turkey against rebel forces, and
that has led to several strikes within Turkish territory, as well as
apparently the rebels themselves firing mortars into Turkey to try to
provoke a Turkish response against Syria. But, that is hardly the
same as a serious Syrian attack on Turkey that would justify the
deployment of Patriot Missiles.

Nor is it
likely that a desperate Syrian regime, about to be toppled would
simply fire off missiles hither and thither. As things stand, if the
regime's back was really against the wall, Assad and his family could
probably escape to Russia, and so would many of its other top
officials. The bigger problem in relation to Syria's stock of
chemical weapons and missiles, would be rather that the jihadists
who would then take over, would then have control of them. That
would be likely to pose a bigger problem for Israel than it would for
Turkey!

Turkey, the
once Colonial Power of the region, is seeking to once more become the
dominant regional power. It has been pushing for the establishment
of a no-fly zone over Syria. Given that the US and others have shown
little interest in themselves getting involved, the establishment of
a “No-Fly Zone”, would give Turkey the legitimacy to take the
lead in implementing it, thereby furthering its own regional
ambitions. Its possible that under those circumstances, Turkey might
want to have the additional security of Patriot Missiles for defence
were such a “No-Fly Zone”, as they tend to do, develop into an
actual offensive campaign by Turkey. Its what the installing of
Patriot Missiles in Turkey – a NATO member - by NATO, signifies.
It would signify NATO giving the go ahead for such a campaign, for
Turkey to become NATO's chosen agent in the region. For Turkey,
seeking to expand its role, as against Israel, that is important. Its unlikely that Turkey wants the missiles to defend against Syrian air attacks. Although, Raytheon the maker of Patriots say they are an effective measure against planes, a contributor from the Royal United Services Institute in a TV discussion, the other day, said they are not designed for use against planes, and are too expensive for such use.

But, for
Turkey, as suggested recently -
Oppose Turkish Intervention In Israel-Palestine
– there is another reason for wanting Patriot Missiles installed on
its border by NATO. If Turkey is to pursue its Neo-Ottoman strategy,
it must be able to assume the role of leading Muslim forces in the
region. As Israel launched its murderous attacks on Gaza last week,
Hamas held talks both with Qatar, and with Turkey. But, it has been
President Morsi that has stolen the limelight. Important functions
have been transferred to Cairo, and it was Egypt that negotiated the
deal between Hamas and Israel. If Turkey is to pursue its ambitions,
it will be lead increasingly to step up to the plate in opposing
Israel. Turkey will not want to do that without feeling that it has
NATO standing behind it. Demanding Patriot Missiles is part of
providing itself with that backstop. It is Turkey saying to Israel,
NATO is standing behind us, don't think of picking a fight.

Increasingly,
Turkey will be led to be the champion of the Palestinians, and
consequently the opponent of Israel. That far more than any sideshow
with Syria, is likely to determine future relations.

Thursday, 22 November 2012

7) REPULSION AND ATTRACTION OF WORKPEOPLE BY THE
FACTORY SYSTEM. CRISES IN THE COTTON TRADE

Here, Marx describes, in more detail, the
contradictory nature of the effects of the introduction of machinery.
On the one hand, there is no doubt that, for it to be worthwhile, to
introduce a machine, the labour-time, required for its production,
must be less than the labour-time it replaces. As previously seen,
under capitalism, that is less than the labour-time that is paid for. To this extent
the effect can be no other than to reduce the amount of labour
employed to produce a given quantity of some particular commodity,
including that employed in producing the machine.

However, the machine has other consequences. It
raises relative surplus value, and it cheapens commodities so that an
increased level of demand for them may arise. In both these ways a
new demand for labour-power can arise. So, Marx writes,

“Nevertheless, in spite of the mass of hands
actually displaced and virtually replaced by machinery, we can
understand how the factory operatives, through the building of more
mills and the extension of old ones in a given industry, may become
more numerous than the manufacturing workmen and handicraftsman that
have been displaced. Suppose, for example, that in the old mode of
production, a capital of £500 is employed weekly, two-fifths being
constant and three-fifths variable capital, i.e.,
£200 being laid out in means of production, and £300, say £1 per
man, in labour-power. On the introduction of machinery the
composition of this capital becomes altered. We will suppose it to
consist of four-fifths constant and one-fifth variable, which means
that only £100 is now laid out in labour-power. Consequently,
two-thirds of the workmen are discharged. If now the business
extends, and the total capital employed grows to £1,500 under
unchanged conditions, the number of operatives employed will increase
to 300, just as many as before the introduction of the machinery. If
the capital further grows to £2,000, 400 men will be employed, or
one-third more than under the old system. Their numbers have, in
point of fact, increased by 100, but relatively, i.e., in proportion
to the total capital advanced, they have diminished by 800, for the
£2,000 capital would, in the old state of things, have employed
1,200 instead of 400 men. Hence, a relative decrease in the number of
hands is consistent with an actual increase.” (p 422-3)

In previous chapters, its also been seen, how
Capitalist development means that, as it expands, the amount of
constant capital grows relative to labour-power. But, again this is
a contradictory process. There are times when capital expands purely
quantitatively on the same technical basis i.e. just more factories
are built, more firms arise, and so the demand for labour grows in
the same proportion. But, at other times, of more feverish
development, that I would term a Long Wave Boom, a rash of new
technological developments are introduced rapidly. Capital expands
not just quantitatively but qualitatively. There may be a sharp
reduction in the amount of labour-power employed relatively, as new
technologies displace existing workers, some existing firms, or even
entire industries, which may disappear. (That was true e.g. about all
those people employed in industries related to horse-drawn carriages,
that disappeared as motor vehicles were introduced.) But, this
occurs simultaneously with a large increase in the absolute quantity
of labour-power employed, as whole new industries are developed, and
the total level of social production expands at a faster rate.

Marx wrote,

“This
first period, during which machinery conquers its field of action, is
of decisive importance owing to the extraordinary profits that it
helps to produce. These profits not only form a source of accelerated
accumulation, but also attract into the favoured sphere of production
a large part of the additional social capital that is being
constantly created, and is ever on the look-out for new investments.
The special advantages of this first period of fast and furious
activity are felt in every branch of production that machinery
invades. So soon, however, as the factory system has gained a certain
breadth of footing and a definite degree of maturity, and,
especially, so soon as its technical basis, machinery, is itself
produced by machinery; so soon as coal mining and iron mining, the
metal industries, and the means of transport have been
revolutionised; so soon, in short, as the general conditions
requisite for production by the modern industrial system have been
established, this mode of production acquires an elasticity, a
capacity for sudden extension by leaps and bounds that finds no
hindrance except in the supply of raw material and in the disposal of
the produce.” (p 424)

As I have set out elsewhere, the solution to the
last of these constraints – the disposal of the produce – can be
and is resolved, by the continual introduction of new types of Use
Values that can be sold as commodities. This is also what Marx talks
about in the Grundrisse, when he speaks about the “Civilising
Mission of Capitalism”, which forever has to create these new types
of Use Values, for that very reason, to be sold to workers, and by
that very process continually extends the workers horizons. The
limitation here essentially becomes a technical one of having
sufficient new Use Values to be introduced to absorb the Surplus
Capital, so as to avoid overproduction. Again, this is the essential
feature of the Long Wave. In periods of boom, technological
developments create sufficient new base technologies to allow that to
happen, in periods of Long Wave downturn, they do not.

It also has other consequences. In these periods,
when workers are thrown out of employment, it creates a drive towards
emigration, which was seen in to North America, India, and Australia.
Combined with the existing colonial empires, this provided an
impetus for these colonies to become mainly sources of the required
raw materials, as well as markets for the manufactured goods. In a
way, this replicates the previous division between town and country,
and the social division of labour built on it. But, it now creates
this social division of labour at a global level. I have described
elsewhere -
Imperialism, Industrialisation and Trade
– how the development of capital created yet another new
International Division of Labour, particularly after WWII.

The seeds of that development could, however, be
seen at the time Marx was writing. For example, he writes, of the
United States in 1866,

“The economic development of the United
States is itself a product of European, more especially of English
modern industry. In their present form (1866) the States must still
be considered a European colony.”

But, by the time of the Fourth German Edition,
Engels had appended to this note,

“Since then they have developed into a
country whose industry holds second place in the world, without on
that account entirely losing their colonial character.” (Note 2, p
425)

The same kind of development has occurred in many
former colonies, in the latter part of the 20th Century,
and continues to spread into the 21st Century. Today, it
is Africa's turn to experience rapid industrial development.

The reason for the scramble for sources of cheap
raw materials and for markets for goods stems directly from the
competition between relatively large numbers of companies, each
producing essentially homogeneous commodities (i.e. one yard of
cotton drill is essentially the same as any other), and each forced
to try to expand its market share on the basis of lower prices.

“The enormous power,
inherent in the factory system, of expanding by jumps, and the
dependence of that system on the markets of the world, necessarily
beget feverish production, followed by over-filling of the markets,
whereupon contraction of the markets brings on crippling of
production. The life of modern industry becomes a series of periods
of moderate activity, prosperity, over-production, crisis and
stagnation. The uncertainty and instability to which machinery
subjects the employment, and consequently the conditions of
existence, of the operatives become normal, owing to these periodic
changes of the industrial cycle. Except in the periods of prosperity,
there rages between the capitalists the most furious combat for the
share of each in the markets. This share is directly proportional to
the cheapness of the product. Besides the rivalry that this struggle
begets in the application of improved machinery for replacing
labour-power, and of new methods of production, there also comes a
time in every industrial cycle, when a forcible reduction of wages
beneath the value of labour-power, is attempted for the purpose of
cheapening commodities.” (p 425-7)

In contrast to Lenin's argument in
Imperialism: The Highest Stage of Capitalism,
it is, if anything, this pre-monopoly stage of capitalism which
explains the drive to secure colonial possessions, and indeed, as
Bill Warren has pointed out in “Imperialism: Pioneer of
Capitalism”, it was during this pre-monopoly stage of capitalism
that the world WAS divided up into colonial empires.

In fact, as Engels sets out in his
Critique Of The Erfurt Programme,
by the end of the 19th Century, the development of large
companies and corporations brings to an end this period of privately
owned capital, but also of the “planlessness”described here by
Marx. From the beginning of the 20th Century, with the
economy being dominated by a relatively small number of huge
corporations, the nature of competition within this more “planned”
capitalism changes. In place of destructive price competition, these
oligopolies seek to increase their profits by an increased focus on
innovation, as a means of reducing costs. They seek to defend and
extend their market share on the basis of a similar use of
innovation, to distinguish their own brand from other commodities, of
a similar type, by a focus onraising quality and choice, a
distinction they attempt to heighten via extensive use of advertising
and marketing.

The Fordist model, adopted by developed economies
in the 20th Century, particularly after WWII, attempts to
extend this planning principle, developed within the enterprise, to
the economy as a whole. Welfare States provide a high degree of
regulation of workers income and expenditure, so as to avoid large
swings in aggregate demand; central banks via monetary policy, help
prevent deflation, and falls in nominal prices, which are
destabilising and destructive of oligopoly profits; the incorporation
of the Trades Unions, via collective bargaining and mutuality
agreements, ensure continual rises in productivity and relative
surplus value, in return for annual real wage increases, thereby
creating stability, and steadily rising aggregate demand.

This is not to say that by these means capitalism
has become crisis free. Far from it. The same tendency towards
overproduction, that Marx indicates above, in relation to 19th
Century privately owned, competitive capitalism, applies even more to
20th and 21st Century, collectively owned,
monopoly capitalism, but the manifestation of that tendency is
necessarily different. In the former, it leads each enterprise to
seek to overcome the limitations of the market, by trying to win a
larger share of it, by even more production, and lower prices, which
acts to only accentuate the overproduction, and intensify the
collapse. In the latter, it leads to enterprises reducing their
output in a planned way, slowing their investments, and laying
workers off, in order to reduce their costs, and prevent falls in
prices.

Andrew Kliman in his book “The Failure of
Capitalist Production” is absolutely correct in this regard,
when he writes,

“This explanation of why prices fall has
nothing to do with the irredeemably flawed notion that technical
progress causes 'overproduction' – the production of too much
output in relation to demand which in turn forces companies to slash
their prices. Companies' decisions about how much output to produce
are based on projections of demand for the output. Since technical
progress does not affect demand – buyers care about the
characteristics of products, not the processes used to produce them –
it will not cause companies to increase their levels of output, all
else being equal.”(Note 4, P 16)

But, of course, this
very process of reducing the level of planned investment, and so on
has the effect of reducing aggregate demand, which in turn leads to a
downward spiral, unless checked by some form of action by the State
in the form of Keynesian fiscal, or Friedmanite Monetary stimulus, or
both. Yet, even the effectiveness of these measures, as was seen in
the 1970's and 80's, is limited by the Long Wave conjuncture. During
the Long Wave downturn, they are likely to lead to “crowding out”,
or to stagflation rather than robust growth. Where they do promote
growth, as happened in the 1990's, it is inflationary growth, leading
to its own problems, which are witnessed today, in the huge debt
overhang affecting Europe and North America.

The consequences of
this are even more severe for those sectors of the economy where
these 19th Century relations still persist i.e. in the
small business sector.

Marx continues,

“A necessary condition, therefore, to the
growth of the number of factory hands, is a proportionally much more
rapid growth of the amount of capital invested in mills. This growth,
however, is conditioned by the ebb and flow of the industrial cycle.
It is, besides, constantly interrupted by the technical progress that
at one time virtually supplies the place of new workmen, at another,
actually displaces old ones. This qualitative change in mechanical
industry continually discharges hands from the factory, or shuts its
doors against the fresh stream of recruits, while the purely
quantitative extension of the factories absorbs not only the men
thrown out of work, but also fresh contingents. The workpeople are
thus continually both repelled and attracted, hustled from pillar to
post, while, at the same time, constant changes take place in the
sex, age, and skill of the levies.” (p 427-8)

And, this uncertainty and disruption continues to
characterise capitalism today. Changes within the structure of
capital, and the uneven development of capital, and of the employment
of technology within it, continually change the nature of the demand
for labour-power.

The kinds of changes that occurred in the 19th
century, with large numbers thrown off the land, and into long hours
of factory work, have been mirrored over the last thirty years by the
large numbers thrown out of relatively stable employment in
manufacturing industry, into unstable, temporary, and casual
employment in service industry, as it has become dominant.

Marx describes the continual fluctuations between
prosperity and depression, in the years between 1815 and 1860 in the
textile industry. These fluctuations often occurred from one year to
the next as opposed to the more prolonged trade cycle witnessed in
later years. During this period, new businesses, often run by former
overlookers, would be set up, during periods of prosperity, only to
be crushed when it ended, partly due to being under capitalised. In
order to save money, capitalists would buy cheaper cotton, and use
cheaper ancillary materials, only to find this raised costs because
of the poorer quality, and because it caused the machines to break
down. They would try to recoup this cost from workers wages, pushing
them below the value of labour-power. This was abetted by the fact
that employers also owned workers' cottages, and deducted rent
directly from wages. This was also the period of the Truck System,
when employers paid wages in tokens only redeemable at the company
owned shop. It was in response to this, and the poor quality of
goods available to them, as a consequence of this monopoly, that
workers established their own Co-operative stores, and agitated for
laws against the Truck System. Ironically, today the Trades Unions
defend the modern Truck System operated by the Capitalist State in
the form of the Welfare State.

As Engels describes, in his later prefaces to “The
Condition of The Working Class in England”, another consequence of
the development of capital beyond these early small scale forms of
capital, was that the bigger capitalists abandoned these kinds of
“penny-pinching” measures as counter-productive. They embraced
the Factory Acts and even Trades Unions. In so doing they
strengthened their own position. As Engels put it,

“And in proportion as this increase took
place, in the same proportion did manufacturing industry become
apparently moralised. The competition of manufacturer against
manufacturer by means of petty thefts upon the workpeople did no
longer pay. Trade had outgrown such low means of making money; they
were not worth while practising for the manufacturing millionaire,
and served merely to keep alive the competition of smaller traders,
thankful to pick up a penny wherever they could. Thus the truck
system was suppressed, the Ten Hours’ Bill was enacted, and a
number of other secondary reforms introduced — much against the
spirit of Free Trade and unbridled competition, but quite as much in
favour of the giant-capitalist in his competition with his less
favoured brother. Moreover, the larger the concern, and with it the
number of hands, the greater the loss and inconvenience caused by
every conflict between master and men; and thus a new spirit came
over the masters, especially the large ones, which taught them to
avoid unnecessary squabbles, to acquiesce in the existence and power
of Trades’ Unions, and finally even to discover in strikes — at
opportune times — a powerful means to serve their own ends. The
largest manufacturers, formerly the leaders of the war against the
working-class, were now the foremost to preach peace and harmony. And
for a very good reason. The fact is that all these concessions to
justice and philanthropy were nothing else but means to accelerate
the concentration of capital in the hands of the few, for whom the
niggardly extra extortions of former years had lost all importance
and had become actual nuisances; and to crush all the quicker and all
the safer their smaller competitors, who could not make both ends
meet without such perquisites. Thus the development of production on
the basis of the capitalistic system has of itself sufficed — at
least in the leading industries, for in the more unimportant branches
this is far from being the case — to do away with all those minor
grievances which aggravated the workman’s fate during its earlier
stages.”

About Me

Left school at 16. Became an ASTMS shop steward at 19, and a lifelong trade union activist. Delegate to North Staffs Trades Council 1974-87. Secretary North Staffs Miners Support Committee 1984-5. President North Staffs Trades Council 1985-6 and 1986-7. Delegate to Staffordshire Association of Trades Councils 1985-7. Delegate West Midlands Regional Council of the TUC 1985-7. Secretary Newcastle UNISON 2000-2.
Member of the International Communist League/Workers Socialist League 1974-87.
Went to University as mature student at age of 24. Obtained Joint Honours Degree in Economics and Politics with Philosophy and Statistics, followed by a Post Graduate Certificate in Education.
Labour Party member since 1974. Stoke City Councillor 1983-4, expelled from Labour group 1983, and resigned from Council in 1984 because of refusing to vote for rent and rate rises, and budget cuts. Staffordshire County Councillor 1997-2005.
Assistant Secretary Stoke District Labour Party 1981, and held pretty much every position from Executive member, to Branch Secretary, and Branch Chair.